Party City Closes Its Doors After 40 Years in Business – One America News Network
By OAN Staff James Meyers
2:17 PM – Friday, December 20, 2024
The celebration is officially over for America’s beloved party supply retailer.
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Known for providing everything needed for the perfect celebration, the retail chain, which boasted over 850 locations worldwide as of August, is shutting its doors due to financial insolvency, according to CNN.
Barry Litwin, the CEO, informed employees on Friday that Party City is “winding down” operations immediately, marking today as their final working day.
“That is unquestionably the hardest message I’ve ever had to convey,” Litwin stated during a video conference with corporate staff.
Litwin further elaborated that despite the company’s best efforts, they have been unable to resolve ongoing financial difficulties.
He attributed the financial issues to inflationary pressures over the past few years, which resulted in higher prices and diminished consumer spending.
“It’s vital for you to know that we’ve done everything within our power to prevent this outcome,” Litwin said.
“Sadly, it’s necessary to initiate an immediate wind-down process.”
Party City employees had been suspecting the company’s impending failure for several weeks, as highlighted by CNN.
The development team was called back from their annual vendor trip and told to return home two weeks prior, according to a former office employee who shared insights with CNN.
This team was informed that the company believed the trip “posed a safety risk,” as Party City had ceased payments to its suppliers.
All corporate employees were sent home on December 10th, with security locking the main entrance of the company headquarters in Woodcliff Lake, New Jersey.
Reports surfaced indicating that employees participating in a Microsoft Teams call on Thursday expressed anger toward management due to a lack of communication about the abrupt recall of the product development team.
According to CNN, other workers discovered that store managers had been notified that all Party City locations would close by February 1st.
“We acknowledge that the flow of communication hasn’t been in line with our usual protocols for sensitive issues like this,” Litwin admitted, addressing employee grievances.
During a video call, Karen McGowan, the chief human resources officer, cried several times while discussing severance and additional benefits to be given to employees, as reported by CNN.
“I’m well aware this is overwhelming,” McGowan said, pausing as she became emotional.
“I sincerely apologize.”
The company had contemplated a second bankruptcy filing earlier in December, following their first filing last year, as they struggled to cover rent across multiple locations.
In January, Party City filed for Chapter 11 bankruptcy protection with $150 million in debtor-in-possession financing to maintain operations. The company reported estimated assets and liabilities ranging from $1 billion to $10 billion.
In September, the retailer reached an agreement to exit bankruptcy, which led to the cancellation of about $1 billion in company debt, effectively transferring all equity value to the company’s lenders.
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